Integrated Reporting in Australia: CPA Report Analysis, VU Sydney

This report provides a comprehensive analysis of integrated reporting in Australia, focusing on the role of the International Integrated Reporting Council (IIRC) and the findings of a CPA Australia report on stakeholder needs and perspectives. The report examines the IIRC's objectives, including promoting integrated thinking and value creation through corporate reporting. It explores the existing and potential roles of integrated reporting in providing relevant information to stakeholders, facilitating stakeholder engagement, ensuring comparability, and maintaining the quality and usefulness of reporting. The analysis compares and contrasts the CPA report's findings with the IIRC's guiding principles, such as stakeholder relationships, materiality, conciseness, reliability, completeness, consistency, and comparability. The report also contrasts the International Framework with General Purpose Financial Reporting (GPFR), highlighting similarities and differences in their objectives, users, and the concept of materiality. The overall goal is to provide a detailed understanding of the challenges and opportunities associated with integrated reporting in the Australian context, supported by relevant accounting literature.

Running head: INTEGRATED REPORTING IN AUSTRALIA
Integrated Reporting in Australia
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Answer to Requirement 1...........................................................................................................2
Answer to Requirement 2...........................................................................................................3
Answer to Requirement 3...........................................................................................................4
Answer to Requirement 4...........................................................................................................5
Answer to (a)..........................................................................................................................5
Answer to (b)..........................................................................................................................6
Answer to (c)..........................................................................................................................6
Answer to (d)..........................................................................................................................6
Answer to Requirement 5...........................................................................................................7
Answer to Requirement 6...........................................................................................................8
References................................................................................................................................10

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Answer to Requirement 1
The inception of the International Integrated Reporting Council (IIRC) could be seen
in August 2010 and the main aim of its development was to bring an internationally
acknowledged framework in picture with the intention to communicate information on the
value creation processes of the business (iasplus.com, 2020). The IIRC reconciles a cross
section of agents from different sector such as investment, corporate, securities, accounting,
standard-setting and academic; and all these led to the development of a Steering Committee,
a three taskforces and a Working Group responsible for dealing with different aspects such as
engagement and communication, development and governance. The long-term vision of IIRC
is the implantation of integrated thinking in the conventional commercial operations in both
the private and public sector; and Integrated Reporting <IR> facilitates this long-term aim of
IIRC through the standards of corporate reporting. It requires to be mentioned that there are
certain guiding principles that have been provided by IIRC with the aim to prepare the
integrated reports by ensuring the disclosure of all material aspects associated with the five
capitals necessary for organizational value creation (integratedreporting.org, 2020). There are
certain specific roles of IIRC and they are mentioned below:
o The role of IIRC is seen in enhancing the quality of information obtainable to the
financial capital providers with the aim to ensure allocating capital in a more effective
and dynamic manner.
o Another role of IIRC is the delivery of a more consistent as well as well-organized
method of corporate reporting through taking into consideration various reporting
factors having material influence on the capability of a company for the creation of
value (Stacchezzini, Melloni & Lai, 2016).
o IIRC aims at improving both stewardship and accountability for main five types of
capitals for promoting comprehension of their interdependencies. These capitals are
financial, manufactured, human, social and relationship, intellectual and natural.
o One crucial role of IIRC is observed in extending its backing towards integrated
thinking, decision-making and actions that are used by the organizations for the
creation of long-term, medium and short-term values.
o One key role of IIRC is to reach to an agreement among business organizations,
listing authorities, governments, investors and accounting bodies associated with the

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development of the best solution for handling the challenges of Integrated Reporting
(Adams, 2015).
o IIRC has the major respobslity to recognize and comprehend the areas with priority
whereas there is a requirement for additional work so that a proper plan of
development can be developed and implemented.
o One major role of IIRC is the improvement of such framework for Integrated
Reporting that specifies the scope as well as major mechanisms associated with the
Integrated Reporting Frameworks.
o It is a primary of the committees in IIRC to take into consideration the areas where
there should be implementation of integrated reporting on voluntary basis.
o Lastly, IIRC has the responsibility of promoting the adoption of Integrated Reporting
by the required regulations as well as preparers of reports (Adams, 2015).
Answer to Requirement 2
a. Providing information that is relevant to stakeholders – Different stakeholders seek
information having relevance to the work they do; such as environmental stakeholders pursue
information that is associated with the environmental issues where financial stakeholders
seek information on various financial matters. Integrated reporting put all this information in
a single report that is useful for different types of stakeholders. However, integrated reports
cannot be viewed as the main source of information (cpaaustralia.com.au, 2020).
b. Stakeholder engagement – To the stakeholders, integrated reports are not regarded as the
primary report for engaging with the companies as direct engagement with the companies is
considered as the main information source. However, integrated reports are largely used by
most of the stakeholders for checking the background information of the company in order to
engage. Integrated reports works as verification tools to the companies to verify the
information (Frias‐Aceituno, Rodriguez‐Ariza & Garcia‐Sanchez, 2013).
c. Comparability of reporting – Integrated reports of different companies have different
structures as the companies prepare them in totally different ways. This contributes to the
lack of comparability of the information in the integrated reports. This lack of comparability
does not concern the environmental stakeholders, but the financial stakeholders are largely
affected with this lack of comparability of information (Mio, 2016).
d. Quality of Reporting – Issue have been raised that integrated reports fails to include the
right indicator as this focus in the headlines of the issues that require less information. In

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addition, integrated reports fail to provide the substantive information on the reported issues
that affect the transparency of these reports. All these together affect the quality of integrated
reports.
e. Usefulness of reporting – Mixed views have been expressed by the stakeholder groups on
the helpfulness of integrated reports. Most of the stakeholders demand to see more ESG and
sustainability related information in the integrated reports, but they feel that the companies
have a tendency of omitting or inadequately discussing the material sustainability issues like
climate change and others. These are crucial issues on the usefulness of integrated reports
(Soyka, 2013).
f. Users of reporting – It is felt by certain specific stakeholders such as community and
ecological stakeholders of the companies that the integrated reports are not targeted at them
as the main targets are the investors. On the other hand, the investors or investment
communities do not recognize themselves as the targeted users of the integrated reports. This
indicates towards major negative of integrated reports (Soyka, 2013).
Answer to Requirement 3
The following discussion undertakes comparing and contrasting the findings of CPA
repost with regards to the below integrated reporting guiding principles:
a. Stakeholder relationships – This guiding principle states that an integrated should
provide the insight into the quality and nature of its relationship with the stakeholders that
includes considering their need and interests. However, as per the findings, integrated reports
fail in considering the needs and demands of the key stakeholders to full extent as this report
are not considered primarily by the stakeholders for assessing the information and
performance of the companies in different aspects (Monterio, 2013).
b. Materiality – This principle states the firms must disclose information in the integrated
report on the matters affecting the value creating capability of them. However, findings of the
report states that the adoption of different structures of integrated report by different
companies affect the comparison of its information; and integrated report fail to extensively
report on the material issues that create major effects on the capability of the companies to
create value (Fasan & Mio, 2017).
c. Conciseness – This particular guiding principle states that an integrated report of a
company needs to be concise. As per the findings of the report, most of the integrated reports

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are not concise as they fail in providing substantive information on the sustainability issues.
In addition, the correct indicators on different sustainability related issues have not been
incorporated in most of the integrated report. All these aspects make integrated reports less
concise.
d. Reliability and completeness – This guiding principle states that all material issues
including both negative and positive aspects need to be included in the integrated reports in
the most balanced manner without any key error. Findings of the report indicate towards that
companies do not put major material issues in the integrated report as this requires reporting
large information. In addition, the absence of crucial substantive information makes the
integrated reports less reliable and completed (Perego, Kennedy & Whiteman, 2016).
e. Consistency and comparability – This principle states that information in the integrated
report need to be presented in consistent manner that enables the comparison of this
information to other companies. As per the findings, companies tend to develop integrated
reports with different structures in the absence of any uniform structure to form the report and
this creates difficulty in comparing the result of a company to another company. This also
affects the consistency of presenting the integrated reports to the stakeholders (Stubbs &
Higgins, 2018).
Answer to Requirement 4
Answer to (a)
The International <IR> Framework can be defined as a report that communicates
information on a firm’s strategy, governance, performance and prospects in the contexts of
external environment for value creation. Its main objective is to develop certain supervisory
principles and other elements to administer the contents of an integrated report
(integratedreporting.org, 2020). On the contrary, General Purpose Financial Reporting
(GPFR) can be defined as the reports that disclosed all the financial information of the
companies. Its main objective is to provide the users with the required financial information
in order to make and evaluate decision on the allocation of scarce resources. As per the above
discussion, the main similarity between these two frameworks is that that both these
frameworks provide the users with the crucial information on the companies (aasb.gov.au,
2020). However, the main difference can be seen in disclosing the types of information by
these two frameworks. The International <IR> Framework provides the users with

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information on the financial and non-financial matters on the performance of the companies
where GPFRs only deliver information on the financial matters of the companies.
Answer to (b)
The above discussion shows that the integrated reports provide the users with both
financial and non-financial information, but the GRFRs provide the users with the financial
information of the firms; and this creates the difference between the users of these two types
of reports. The key users of the integrated reports are the suppliers of financial capital to the
companies along with the stakeholders having interest in the value creation capability of the
companies (integratedreporting.org, 2020). Therefore, the users of integrated reports include
the investors, environmental group and ESG groups that are interested in the value creation of
the companies by considering the sustainability and environmental issues. However, the
operators of the GPFRs are the investors, lenders, creditors, financial analysts, standard
setters and government who are absorbed in the financial performance of the companies. This
is the main difference between the users of integrated reports and GPFRs (aasb.gov.au,
2020).
Answer to (c)
As per integrated reports, an integrated report must reveal information on the issues
that create impact on the company’s capability to create value on short, medium and long
term (integratedreporting.org, 2020). As per Conceptual Framework of IASB, information is
considered as material when omitting or misstating it can affect the decision of the users on
the financial statements of a company. In this case, the main similarity between these two
aspects is that materiality concept is used for the matters and information that are of
significant interest of the stakeholders of the business organizations (aasb.gov.au, 2020).
However, the difference is that materiality associated with integrated report denotes the major
issues that affect the value creation process of the companies on short, medium and long term
which includes both financial and non-financial matters; but materiality as per IASB CF
considers the information on the financial matters of the companies.
Answer to (d)
In case of both the integrated reports and IASB CF, reliability and completeness
denotes the inclusion of material matters in the reports irrespective of whether they are
positive or negative. The same can be seen in case of completeness that means consistency
which states that the companies are required to use same methods for the same times.

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Consistency is connected with comparability as consistency helps in achieving comparability.
The principle of comparability states that the disclosed information must be comparable with
the other companies. Therefore, it can be seen that the above-discussed concepts are same for
both integrated reporting and IASB CF. However, the main difference is that these concepts
are used in integrated reporting for revealing both financial and non-financial information,
but these are used only to disclose the financial information in case of IASB CF
(integratedreporting.org, 2020). These are the main differences and similarities among these
concepts of integrated reporting and IASB CF.
Answer to Requirement 5
The presence of the integrated reports of different companies can be seen in the
website of IIRC and the 2016 integrated reports of four of those companies are selected for
this part of the analysis; they are Hulamin, Royal Bafokeng Platinum, Gold Fields and Waco
International. In the earlier part of the discussion, five guiding principles of <IR> have been
discussed and four of them are selected for this analysis; they are Stakeholder relationship,
materiality, reliability and completeness and consistency and comparability. The discussion is
shown below:
Stakeholder Relationship – It is mentioned under this principle that the companies are
required to disclose the nature and quality of their association with its key stakeholders in
order to disclose that they have taken the interest and needs of these stakeholders. As
mentioned in the 2016 integrated reports of the selected companies, all of them have
disclosed the information on their relationship with the key stakeholders, but differences can
be seen in the way to disclose this information. Hulamin has mentioned the name of its key
stakeholder groups and has discussed about their expectations and concerns that have been
taken into consideration (hulamin.com, 2020). The same approach can be seen in Bafokeng
Platinum, but the company has also specifically disclosed the steps they have taken to resolve
the issues. Waco International has disclosed the nature of its engagement with each
stakeholder group, impact, their key expectations and associated material matters. Gold
Fields has disclosed what initiatives they have taken to resolve the issues of the stakeholders
for developing effective stakeholder engagement.
Materiality – As per this principle, integrated reports should disclose information on the
material issues affecting the firm’s value creation process. The selected companies have
disclosed about the material issues of their business, but difference can be seen in the extent

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of disclosure of the material issues. Bafokeng Platinum has disclosed the material issues
under each type of capital along with its performance against these issues
(bafokengplatinum.co.za, 2020). Gold Fields has disclosed top ten material issues during the
year of 2016 along with the process of assessing these risks. Waco International disclosed
information on material matters, risks, opportunities and impact associated with them and is
strategic responses. However, Hulamin has failed to disclose specific information on material
issues.
Reliability and Completeness – This principle puts the obligation on the companies to
include positive and negative aspects of their performance in response to the material matters
in the most balanced manner. It can be seen in case of Hulamin that it has disclosed only the
positive performance on the material issues, but the opposite can be seen in case of Bafokeng
Platinum as the company has disclosed both the areas where the targets have been achieved
and where the targets have not been achieved. Gold Fields have also disclosed the positive
performance and the same is applicable for Waco International (goldfields.com, 2020).
Consistency and Comparability – This particular principle states that it is the requirement
for the firms to present the integrated reports on a consistent basis so that it can provide the
scope to its users in comparing them with other organizations. It can be seen that all these
four companies have presented their integrated reports, but these reports have been presented
by these companies differently. These four companies have adopted different structures and
formats for presenting the integrated reports. For this reason, the absence of consistency is
there in the integrated reports of these companies. At the same time, information in these
integrated reports cannot be compared to other companies because of the adoption of
different report formats. For this reason, the absence of comparability can also be seen in the
integrated reports of these companies (wacointernational.co.za, 2020).
Answer to Requirement 6
It can be seen from the above discussion that there are certain similarities as well as
differences in the integrated reports of the selected four companies; and there are certain
reasons that are responsible for these similarities and differences (Reuter & Messner, 2015).
All these companies have adopted the principles and standards of the International <IR>
Framework in order to prepare as well as present the integrated reports; and this particular
framework provides all the companies with the same guiding principles and standards to
prepare and present the integrated reports. It implies that all these companies have adopted

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the same principles of the International <IR> Framework in their integrated reports. For this
reason, the integrated reports of these companies have certain same aspects or similarities;
such as contents of the reports and others (Flower, 2015).
Apart from similarities, certain differences can also be seen in the integrated reports
of these four companies. It needs to be mentioned that the International <IR> Framework has
not provided the companies with any specific report structure that needs to be followed by
these companies uniformly. For this reason, these companies have adopted different
structures and formats with the aim to presenting the information in the integrated reports.
Another reason of these differences is the tendency of most of the companies to portray the
good performance areas instead of the bad performance areas. Displaying the areas where the
companies have not been able in achieving the targets may affect the image of them and for
this reason the companies have put more focus on disclosing the areas with good performance
(Hughen, Lulseged & Upton, 2014). Moreover, business organizations put more focus on
providing information that can please the investors; and in this process, they ignore the
information needs of other stakeholder groups such as environmental stakeholders, ESG
stakeholders and others. For this reason, the absence of balance can be seen in the disclosure
of information in the integrated reports of these companies. Integrated reports need to
consider both the financial and non-financial information; but most of the business
organizations do not meet the information need of the environmental stakeholders and this
create differences in the integrated reports (Busco et al., 2013). The above discussed aspects
are the key reasons that are responsible for the resemblances and variances in the selected
companies’ integrated reports. The primary users of the integrated reports are required to take
into consideration these reasons that creating the differences.

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